What is ZCash?
ZCash is a cryptocurrency with a decentralized blockchain that provides anonymity for its users and their transactions. As a digital currency, it is similar to Bitcoin in a lot of ways including the open-source feature, but their major differences lie in the level of privacy and fungilibility that each provides. It is the first cryptocurrency that combine the immutability of the blockchain with advance cryptographic techniques to provide secure and completely confidential transactions.
Zooko Wilcox-O’Hearn, is an American Colorado-based computer security specialist, cypherpunk, and CEO of Zcash. He has more than 20 years of experience in an open, decentralized system, cryptography and information security and startups. He is recognized for his work on Digi Cash, Mojo Nation, ZRTP, ” Zooko’s Triangle,” Tahoe-LAF5, BLAKE2, and SPHINCS.
How is ZCash different from Bitcoin?
ZEC is a separate cryptocurrency and maintaining its own new block, its team builds the infrastructure on the bitcoin core code. Additions to the underlying code that are specific to Zcash include updating the proof-of-work consensus model and introducing zero-knowledge proofs to enhance user privacy.
Bitcoin, and many other cryptocurrencies, rely on private keys to identify users. While these keys are cryptographically generated, an address that is used for multiple transactions over time can become linked to a particular key, leaving a “paper trail” of sorts that is tied to that user. The Bitcoin Blockchain keeps a record of every transaction, including the addresses of both parties involved and the amount of the transaction, which is accessible to the public. The Zcash blockchain, on the other hand, only shows that a transaction occurred, without revealing the amount exchanged or information about the identity of either the sender or the recipient.
Zero-knowledge Proof .
Zcash uses zk-SNARKs to prove that the conditions for a valid transaction have been satisfied without revealing any crucial information about the addresses or values involved. The sender of a shielded transaction constructs a proof to show that, with high probability:
- the input values sum to the output values for each shielded transfer.
- the sender proves that they have the private spending keys of the input notes, giving them the authority to spend.
- The private spending keys of the input notes are cryptographically linked to a signature over the whole transaction, in such a way that the transaction cannot be modified by a party who did not know these private keys.
Additionally, some other conditions must be met by shielded transactions.
In Zcash, the shielded equivalent of a UTXO is called a “commitment”, and spending a commitment involves revealing a “nullifier”. Zcash nodes keep lists of all the commitments that have been created, and all the nullifiers that have been revealed. Commitments and nullifiers are stored as hashes, to avoid disclosing any information about the commitments, or which nullifiers relate to which commitments.
For each new note created by a shielded payment, a commitment is published which consists of a hash of: the address to which the note was sent; the amount being sent; a number “rho” which is unique to this note (later used to derive the nullifier); and a random nonce.
Commitment = HASH(recipient address, amount, rho, r)
When a shielded transaction is spent, the sender uses their spending key to publish a nullifier. Which is the hash of the secret unique number (“rho”) from an existing commitment that has not been spent. Provides a zero-knowledge proof demonstrating that they are authorized to spend it. This hash must not already be in the set of nullifiers tracking spent transactions kept by every node in the blockchain.
Nullifier = HASH(spending key, rho)
The zero-knowledge proof for a shielded transaction verifies that, in addition to the conditions listed above.
- For each input note, a revealed commitment exists.
- The nullifiers and note commitments are computed correctly.
- It is infeasible for the nullifier of an output note to collide with the nullifier of any other note.
In addition to the spending keys used to control addresses. Zcash uses a set of proving and verifying keys to create and check proofs. These keys are generated in the public parameter ceremony discussed above, and shared among all participants in the Zcash network. For each shielded transaction, the sender uses their proving key to generate a proof that their inputs are valid. Miners check that the shielded transaction follows consensus rules by checking the prover’s computation with the verifying key. The way that Zcash’s proof generation is designed requires the prover to do more work up-front, but it simplifies verifying. So that the major computational work is offloaded to the creator of the transaction. This is why creating a shielded Zcash transaction can take several seconds, while verifying that a transaction is valid only takes milliseconds).
Proof-of-work consensus model.
ZCash are currently using Equihash as the proof-of-work for block mining in Zcash. Equihash is a proof-of-work algorithm devised by Alex Biryukov and Dmitry Khovratovich. It is based on a computer science and cryptography concept called the Generalized Birthday Problem.
How will Zcash be created?
Like Bitcoin, Zcash is a mined cryptocurrency. Which means that new ZEC are created each time a block is added to the Zcash blockchain. New blocks are created roughly every 150 seconds (2.5 minutes). The monetary supply curve mirrors Bitcoin’s. Except that, because Zcash’s blocks will be mined 4 times as frequently as Bitcoin’s. The number of ZEC created per Zcash block are a quarter the number of BTC created per Bitcoin block. The first weeks after Zcash launch were a “slow start” mining period.
What is slow-start mining?
In order to minimize the impact of any unforeseen problems during the launch of Zcash, the amount of ZEC each time a block was mined started at zero and gradually ramped up to 12.5 ZEC after 34 days. The slow-start period ended on December 1st, 2016.
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